The Department of Finance (DOF)-led Fiscal Incentives Review Board (FIRB) said Thursday, Jan. 12, that it is almost finished crafting the guidelines on the suspension or withdrawal of tax incentives, and the cancellation of project or activity registration of business enterprises (RBEs).
The FIRB also said that besides finalizing the guidelines, they have likewise approved applications for tax incentives from new domestic enterprises engaged in the operation of Tourist Accommodation Facilities and the construction of Common Passive Telecommunications Tower Infrastructures.
The FIRB said the investments was approved last Jan. 6, and will accelerate the government’s ongoing economic recovery efforts, specifically in areas of tourism and digitalization.
“As we attract all types of big-ticket local and foreign investments into the country, we also strive to be inclusive and not industry-specific in our grant of fiscal incentives. Largely, what we want to ensure is for these projects to result in a win-win situation for both the RBEs and the economy,” according to DOF Secretary and FIRB Chairperson, Benjamin E. Diokno.
The FIRB said the guidelines will provide uniform rules for imposing penalties on non-compliant RBEs. “FIRB’s power to suspend or withdraw tax incentives, or cancel business registration was granted under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act,” it said.
In the same statement, the FIRB also said that public consultation by the end of January 2023 will be conducted once the guidelines have been approved by the FIRB-Technical Committee.
“The guidelines will clarify the procedure for RBEs when responding to a show cause order issued by their respective investment promotion agencies (IPAs) or the FIRB, or when filing an appeal from an adverse finding,” it added.
Diokno said earlier that fiscal prudence must be exercised in granting tax incentives under the CREATE Act.
“What we aim through the CREATE Act is to attach accountability and responsibility for every tax exemption given, since the incentives we give out entail important costs to the government,” he said.
Diokno said the FIRB’s modernized fiscal incentives system enables the CREATE Act “to effectively generate more investments and quality jobs that ultimately boost economic growth.”
The 2022 Strategic Investment Priority Plan (SIPP), developed by the Board of Investments (BOI) in coordination with the FIRB, is the primary basis for determining priority industries, projects, and activities that can be granted fiscal incentives under the CREATE Act.
Categorized into three tiers, priority projects and activities listed under Tier III are directed towards emerging technologies that are consistent with the fourth industrial revolution, such as: artificial intelligence, nanotechnology, biotechnology, advanced digital production technologies, and innovation support facilities including space-related infrastructures. Moreover, these activities represent those that are qualified for longer income tax holidays.